Co-founder and CEO of winniea childcare marketplace that helps millions of parents discover daycare, preschool and more.
The childcare sector is struggling. Childcare is Very expensive for families, but at the same time, childcare companies are running at wafer-thin margins that costs of renting and keeping (subscription required) talent. We often talk about government and employer subsidies as possible solutions to the problem, but money alone is not enough. Nurseries have to deal with a personnel crisis, forcing them to close classrooms and have capacity for fewer children. According to recent estimates half a million families no longer have childcare facilities due to staff shortages.
How regulation contributes to the problem
These problems ultimately stem from the fact that childcare is a highly regulated industry. While those regulations serve an important purpose, it also makes it much more expensive to run a childcare business and contributes to the lack of available childcare spaces. For example, the licensing rules for a home childcare business in Wisconsin are: 37 pages long and include rules that are difficult to parse, such as: “If there is more than one caregiver with the children, there should be no more than a total of 4 children under 2 years of age under the care of the center when care is provided at a level greater than 6 feet above or below ground level.”
However, the trickiest of all childcare arrangements has to do with the credentials required to enter the field. For example, in New York City, all classrooms must be led by a group teacher who must possess a bachelor’s degree in early childhood education or a related field and two years of documented experience in a childcare setting, in addition to state certification. There are so many qualified professionals who have degrees in other fields and who have the passion and drive to care for children but are held back by educational requirements that can be time consuming and expensive.
Creative solutions from entrepreneurs
The good news is that all the regulations in the childcare sector mean that creative solutions are in high demand. This is an industry ripe for entrepreneurial innovation. For example, in my own company, we partner with daycare centers that can provide preschool education to new employees entering the field. We then bring these jobs to the attention of our audience of millions of parents who may not yet have all the necessary qualifications, but are interested in these positions. In this way we create a new range of potential employees for centres. Other members of the community may also intervene, such as grandparents. In reality, studies have shown that seniors who care for grandchildren or other children live longer than those who do not.
Entrepreneurs are also tackling other opportunities arising from the childcare scheme. A growing number of startups are helping small home-based providers obtain and maintain a license. Other companies are working to match families with caregivers to make home care more affordable in locations where there are not enough established childcare companies. Whether it’s making regulation less burdensome or finding legal, trusted ways to get around regulation, the childcare industry is proof that regulation can drive innovation.
There’s no question that the US needs more money for childcare as a whole, but helping the industry better navigate the regulations so that money can be used more efficiently can also go a long way. Making it easier for newcomers to work in childcare and lightening the burden of smaller programs strengthens the care economy and empowers families.